Before making an offer, there is a common question that arises during the loan consultation: Should you go with a 30-year fixed-rate mortgage or an adjustable-rate mortgage (ARM)? Lexington is an area where the median home price exceeds $1.5 million, so this choice can significantly affect your monthly payment. According to Zillow data as of May 2026, the median sale price in Lexington was around $1.53 million.

In this price range, it is often the case that a traditional loan alone will not suffice. As of 2026, the conforming loan limit in most areas of the country is $832,750. Middlesex County is classified as a high-cost area by the FHFA, raising the limit to $1,249,125. However, it is common for the median price in Lexington to exceed this cap, leading many transactions to require jumbo loans.

In fact, one case I consulted involved a family moving from another state to Lexington with a budget starting at $1.3 million. Even with a traditional loan, it was difficult to reach the asking price, and they ultimately had to switch to a jumbo loan while improving their credit score to the 700s. If you do not check the jumbo loan conditions during the pre-approval stage, you may waste time in a competitive offer situation.

Jumbo loans have higher thresholds than traditional loans. Typically, a credit score of 700 or higher is required, and down payments often range from 10% to 20%. This is where the choice between fixed and adjustable rates comes into play. If you plan to move or resell within 5 to 7 years, an ARM with a lower fixed rate for the initial years can help reduce monthly payment burdens.

Conversely, if you plan to stay in the home for a long time, the fluctuating payments associated with an adjustable-rate mortgage can be a concern. Choosing a 30-year fixed-rate mortgage, where you pay the same amount each month, appears to be a more stable option for budget management. This is especially true for families considering long-term residency based on the public school assignments in Lexington, as fixed rates often align better with their needs.

Many Korean families looking to move to Lexington are influenced by the school district. According to GreatSchools, Lexington High School and nearby elementary and middle schools generally receive high ratings. However, school district boundaries can change frequently at the address level, so it is advisable to verify the assigned school for the specific address before purchasing.

In this price range in Lexington, even if you choose a traditional loan, you will need over $300,000 for a 20% down payment. If the down payment is less than 20%, PMI will apply, and the principle that you can cancel PMI once your equity exceeds 20% often does not apply to jumbo loans, so you should check the conditions with each lender.

If you are moving from another state to New England, you should also consider the Massachusetts property tax system. Lexington has a relatively high property tax rate compared to other towns near Boston. If you base your budget solely on the tax rate from your previous state, your monthly payment calculations may be off.

Some investors are looking at Lexington for rental income. Due to the area's strong school district, vacancy risks are relatively low, but the high purchase prices mean that rental yields tend to be lower compared to other towns in Massachusetts. Even if you approach it with the expectation of capital gains, you cannot assume prices will always rise, so risks should be considered as well.

Ultimately, the key factor in determining the loan structure in Lexington is how long you plan to stay in the home. If you are looking at a short-term stay, it may be worth considering an ARM to lower initial burdens, while a long-term plan would suggest securing predictability with a fixed-rate mortgage as a more stable choice.

The prices and loan limits mentioned here are based on data from the first half of 2026, and actual loan conditions may vary based on credit status and lender. This article is not investment or legal advice, and it is recommended to consult a mortgage expert before finalizing any contracts.